Final answer:
A PLLC provides liability protection for professionals, limiting their personal liability to their investment in the company.
Step-by-step explanation:
A Professional Limited Liability Company (PLLC) is a type of business entity that provides liability protection for its owners, who are typically professionals such as doctors, lawyers, or accountants. Similar to a Limited Liability Partnership (LLP), a PLLC limits the liability of its owners to their investment in the company. This means that the personal assets of the owners, such as their home, car, and personal bank accounts, are not at risk if the company faces financial difficulties or legal issues.
For example, if a doctor is part of a PLLC and a malpractice lawsuit is filed against the company, the doctor's personal assets would not be at risk beyond the amount they have invested in the PLLC. This liability protection is important for professionals who want to protect their personal assets while running a business.